08.2016

Certified International Property Specialist

TO LOCAL, INTERNATIONAL & LIFESTYLE REAL ESTATE

> FINDING SUCCESS The Big Question: How do I build a global real estate practice?

Many agents aspiring to “go global” have wrestled with this question at some point in their careers. There isn’t a one size fits all answer to this question, but there are common threads among the most successful international business practices.

One such thread is positioning yourself as a trusted advisor and knowledgeable international expert. The more you add value, by providing vital information and assistance, the more respect and business will come your way.

Another is adopting a proactive global mindset – one that sees international activities and opportunities in every direction. You’ll find global business in markets of all sizes, in commercial and residential real estate, in buyers as well as sellers, and in countries all over the world.

To demonstrate, this issue of Global Perspectives showcases three agents who are making solid inroads with international clients, from a long-term industry veteran who completely overhauled his business to two rising stars on the international stage. Their methods vary, based on their personal situations and strengths, but they share a proactive global mindset. Learn how they positioned their businesses for international success. FINDING SUCCESS

Torontoism Team Goes Global How One Agent Retooled His Business Certified International Property Specialist Richard Silver had already established a very successful real estate practice in Toronto. His extensive knowledge of technology and social media savvy attracted both real estate clients and invitations to speak at industry events.

Never one to rest on his laurels, however, Silver continued to monitor his local market and noticed changes— more showings and offerings were coming from Chinese agents and Chinese clients. Upon closer inspection, market data supported his hunches. Four years ago, Chinese clients represented roughly 10 percent of the housing market. Since then, that figure has doubled.

Not every agent is willing to reengineer his or her entire business model for a new opportunity, but Silver knew he was onto something. Besides, he genuinely enjoys a challenge. His story serves as a model for other global agents wanting to follow a similar path.

Why China? “EVEN THOUGH ALL Almost every real estate market offers cross-border opportunities originating from many different countries. REAL ESTATE MARKETS In numerous markets, however, Chinese buyers play a dominant role. ARE LOCAL, IT’S INCREASINGLY In the U.S., for example, buyers from China hold the top spot among all international buyers of U.S. homes; IMPORTANT TO HAVE they also rank among the top five international buyers in 46 of the 50 states. GLOBAL REACH. SHIFTING MY BUSINESS MODEL The situation in Canada is very similar. According to Chinese property listing site Juwai, the total value of all HAS BEEN A MAJOR Canadian property inquiries made by prospective Chinese buyers nearly tripled in one year—from $5.6 billion UNDERTAKING, BUT in 2014 to $14.9 billion in 2015. Toronto was their top Canadian destination, by value of properties searched I FIRMLY BELIEVE IT’S ONE ($7.4 billion), followed by Vancouver ($2.5 billion). OF THE BEST DECISIONS I’VE MADE.” The dominance of Chinese buyers in various markets can be explained, in part, by demographic data. —Richard Silver The population of China’s middle class alone—roughly 350 million people—is comparable to the entire population of the U.S. and Canada combined! Further, middle class Chinese households have money to spend and a strong appetite for foreign real estate.

Initial Groundwork Top Destination Countries for Chinese Emigrants To elevate his opportunities with this (mid-2015 estimates) growing group of buyers, Silver took several significant steps: 1. Hong Kong 2,308,000 Expanded team — While Silver had 2. United States primarily worked independently, he 2,104,000 realized a team approach was essential for 3. Korea capturing Chinese clients. Prior to pivoting 751,000 his practice specifically towards China, 4. Canada Silver added two team members—a sales 711,000 representative who was also a recent 5. Japan British immigrant and a senior sales 652,000 representative who serves as Silver’s

Source: Migration Policy Institute, based on United Nations data. backup for his original “farmed” markets.

2 ~ Global Perspectives 08.2016 Torontoism Team Goes Global How One Agent Retooled His Business Certified International Property Specialist Next, he invited a talented local agent, originally from Mainland Professional networking — Given the challenges of marketing prop- China, to join his team, in order to gain Chinese language skills and erties directly to Chinese buyers, Silver has found it very beneficial more cultural experience. She quickly became so successful that he to forge strong referral relationships with real estate salespeople needed to hire a Mandarin-speaking assistant to support her. Two in China, Hong Kong and Taiwan, as well as China-based bankers additional assistants now round out the Torontoism team. working with high net-worth clients.

Specialized training — A strong believer in the importance of Real estate practices — Silver points out that there are huge professional education, Silver completed his Certified International differences between Hong Kong and Taiwan relative to mainland Property Specialist (CIPS) designation, which he says provided China. For example, real estate is a well-established industry in spot-on insights into the differences in real estate practices around Hong Kong and Taiwan with many experienced agents, whereas the world and cultural issues. sales reps in China tend to be very young.

Brokerage affiliation — Recognizing the power of affiliation with Additionally, Silver quickly discovered that everything is up for a prestigious international real estate brand, Silver moved to negotiation, including referral fees. “Don’t be surprised or offended Sotheby’s International Realty Canada. In addition to gaining more by requests for large referral fees or low-ball property offers,” he Chinese clients, Silver’s goal was to capture more high net-worth advises. “It’s all part of the Chinese negotiation culture. If a buyer buyers—a group with strong affinity towards the Sotheby’s brand, really wants the property, they’ll pay. If not, they’re just enjoying the including its auction house for fine wine, art and jewelry. Referrals negotiation process.” through this branch of the company have been a huge bonus. Purchase Motivations Chinese Challenges When working with any buyer, it’s extremely beneficial to These shifts in Silver’s business model laid a solid foundation, understand what’s driving their interest. Among Chinese buyers, but there were still numerous challenges to tackle, specific to Silver has found the answers often include: connecting with Chinese buyers, including: The next generation — Frequently, the decision to buy property Marketing properties — The “Great Firewall of China” prevents overlaps with providing a Western education for children, typically citizens from accessing many sites hosted outside of China, at the university level, but sometimes at younger ages. Condos near including Facebook, Twitter or Google. The same is true for many college campuses are popular options, providing rental income popular real estate portals from other countries. before and/or after a student attends. Another benefit is that Canada automatically offers foreign students a three-year work To display property listings, Silver needed to learn how to work permit at the conclusion of their studies. within an entirely different system. He relies on sites like Juwai.com and Caimeiju.com, both developed specifically for Chinese buyers True ownership — In China, all property belongs to the government and operating behind China’s firewall. He’s also forged a cooperative and is only available on a leasehold basis. As a result, buyers from agreement with a local brokerage to feature his listings. China are strongly attracted to freehold ownership, which Canada offers to foreigners without restrictions. Client communications — Adding two Mandarin-speaking members to his team was the first step in accommodating Chinese clients; Sheltering wealth — Even though China has embarked upon limited these team members often work odd hours to contend with the financial reforms, many citizens still feel safer holding their wealth roughly 12-hour difference in time zones, which can be difficult, but offshore, adding to the appeal of foreign real estate investments. has also been an important aspect of serving their clients. Savvy investors — As a rule, Chinese buyers carefully research In addition to direct phone contact, buyers from China prefer potential property investments and are less likely to make decisions communicating by text rather than email. WeChat is the most based on emotional appeal. popular service, offering both mobile text and voice messaging, as well as web-based versions for Windows and Mac. (continued on page 4.)

08.2016 Global Perspectives ~ 3 FINDING SUCCESS

(continued from page 3.) Torontoism Team Goes Global How One Agent Retooled His Business Certified International Property Specialist Agent Essentials Silver has made a substantial investment in ensuring his success with 8 More Recommendations global clients. He cites these steps as being among the most important: for Building Business with Chinese Clients

Training — As noted earlier, Silver found that earning the CIPS 1. Spend money in non-local media and websites. designation laid a solid educational foundation for his global practice. It’s the only way to get past the “Great Firewall He also relies on other designees (the CIPS Network) for additional of China.” professional networking opportunities. 2. Join a local chapter of the Asian Real Estate Customs — Whether interacting with a local Chinese community Association of America (AREAA) and attend (greater metropolitan Toronto has five distinct areas), attending conferences. With over 15,000 members and 35 international conferences, or traveling overseas, it’s important to chapters in the U.S. and Canada, AREAA offers avoid cultural faux pas. excellent networking opportunities.

Involvement — Look for groups within your local REALTOR® board, 3. Get educated on local schools and universities. including NAR-affiliated Global Business Councils and related groups Since education is central to many Chinese buyers’ (based on language spoken, for example). Attend their fundraisers and purchasing decision, it’s essential to be informed support them as a volunteer. about all options for all ages.

Travel — Even though much can be accomplished from home, 4. Learn about Feng Shui. Attempt to incorporate international travel goes a long way towards cementing relationships these elements when staging homes. and developing a richer cultural understanding. Silver has made a point of attending Sotheby’s networking events and visiting overseas 5. Explore and get used to eating unusual foods. branches. “I offered presentations on our local market, featuring areas Food is central to Chinese celebrations and it’s and properties that would be attractive to Chinese clients,” he explains. important to participate in and potentially host “It’s a great way to become known as ‘the Toronto guy.’” these occasions.

Results 6. When visiting business colleagues, bring gifts. Consistently among the top one percent of salespeople in Toronto, Also learn what gifts are considered appropriate Silver’s efforts to expand his international presence are already paying (or offensive). off. Currently, 30 percent of his business comes from Chinese clients. He’s also seen a change in the quality and price range of the properties 7. Learn the proper protocol for exchanging business they’re marketing. cards. Throughout Asia, there are extensive rules of etiquette for both giving and receiving. In addition to winning new buyer-clients, he’s found that his global efforts are giving him an edge in winning new listings. Sellers are 8. Pay attention to lucky/unlucky numbers. Eight, for genuinely impressed when he explains how he can provide their home example, is one of the luckiest numbers, whereas much broader visibility to a substantial and important market, largely four signifies death. Attempt to adjust listing prices untouched by other local agents. and appointments (dates) accordingly.

“Even though all real estate markets are local, it’s increasingly important to have global reach,” explains Silver. “Shifting my business model has been a major undertaking, but I firmly believe it’s one of the best decisions I’ve made. Plus, it’s been genuinely fun and exciting!”

Note: For additional insights on Chinese market dynamics and buying trends, see the February 2016 issue of Global Perspectives.

4 ~ Global Perspectives 08.2016 Certified International Property Specialist Brian Woods, CIPS Team Realty and Investment Solutions, LLC Royal Palm Beach, FL

If you don’t get out and talk to people, you won’t hear what they’re doing, which can be your best source of new ideas and business opportunities.

I’ve been very enthusiastic about global real estate opportunities, taking three or four international trips a year, typically making presentations to agents and investor groups. Whether I’m visiting Canada, Colombia, Panama, China, or other countries, my goal is always the same—to establish point people in various destinations through whom I can gain access to an even broader set of relationships.

Success is never simple, but I’ve seen these won’t be familiar with many aspects of how Be persistent — Global business won’t qualities as among the most important: things are done in a foreign market and will happen overnight, but if you stick with it, rely heavily on your assistance. We’re it will come. And once you do land an Leverage your CIPS – The training really fortunate in that we have a very diverse international buyer, you can pretty much helped me understand how real estate team of agents and value added partners count on several additional referral-based practices vary across countries. Since who can help solve various challenges. transactions when they pass your name completing the coursework, I’ve also relied along to others back home. heavily on the CIPS Network. It’s an Get involved — There are many ways to do exceptionally strong and growing group this. I’ve chosen travel and REALTOR® I firmly believe global is the future direction of professionals who’ve invested in their leadership, but that’s not essential. What’s of the real estate industry, especially in the business and “get” global real estate. more important is simply getting involved U.S., which attracts buyers from all over Whenever I travel internationally, I rely locally (especially if your association has a the world. on CIPS connections to build my global Global Business Council) and at various network. international networking events. If you don’t get out and talk to people, you won’t Deliver top-notch client service - When hear what they’re doing, which can be working with international clients, you have your best source of new ideas and to offer “white glove” service. These clients business opportunities.

08.2016 Global Perspectives ~ 5 FINDING SUCCESS

Robert Rosmis, ABR®, CIPS Certified International Property Specialist Spaces Property Group LLC Chicago, IL

My own personal strengths are in coaching, teaching and training, which I’ve leveraged to enhance my global real estate networking efforts.

I’ve always been an entrepreneur, and real with other agents and forge stronger to join and remain in contact, sharing class estate gave me the perfect platform to build cooperative working relationships. information, events, real estate tips and on. In 2013, I became a licensed agent photos. My sincere interest in reaching out with @Properties. Two years later, I was To that end, I’ve started hosting monthly and collaborating with other agents has recruited by Spaces Property Group to head webinars/conference calls on various global been a great way to jumpstart my up their Sales Division and manage their real estate topics, based on the connections global efforts. training/recruitment efforts. Earlier this year I’ve made. For example, I decided to expand my reach by earning my when attending a recent CIPS designation. Mexican Association of Real Estate Agents (AMPI) event, So far in 2016, I’ve visited four countries I met Mitch Creekmore with (Germany, Dubai, Greece, and Costa Rica). Stewart Title. This led to a My goal on these trips is to meet and joint program that examined connect with quality people who are already the entire real estate established in their respective markets. My transaction process in CIPS instructor David Wyant and his wife Mexico, including buyer Patsy have been instrumental in pointing me acquisition, searching for towards the right people, and the homes, and the steps right opportunities. between contract and closing. Having global connections helps set me apart from other local agents and provides Mitch provided most of the additional reach for my clients. Even if I’m content, but I took the lead referring a client to another agent, however, in promoting the event, primarily I want to retain some direct involvement in on the CIPS-only Facebook page (Official their experience instead of simply passing Group: NAR CIPS Designees). Participation them off to someone else. in these events is growing, accomplishing two important goals—helping CIPS My own personal strengths are in coaching, designees work toxgether and raising my teaching and training, which I’ve leveraged visibility within the group. to enhance my global real estate networking efforts. I’m always looking for Similarly, I’ve launched a CIPS – Midwest opportunities to share valuable insights group on Facebook, inviting my classmates

6 ~ Global Perspectives 08.2016 Certified International Property Specialist 7 Ways to Leverage the Official 1. Reach out with referrals 5. Share helpful articles Group: NAR CIPS Designees

2. Share good ideas for staying in This private Facebook group now touch with clients includes nearly 1,200 members and makes it easy to connect with other CIPS designees. Go beyond simply introducing yourself to the group. Make a bigger impression by following these tips and examples. 6. Promote your international events

3. Pass along important industry news 7. Tell others about your successes!

4. Ask for suggestions and solutions

08.2016 Global Perspectives ~ 7 430 North Michigan Avenue • Chicago, IL 60611-4087 800.874.6500 • www.REALTOR.org

FINDING SUCCESS

Certified International Property Specialist Network with fellow designees at the REALTORS® Conference & Expo, November 4-7, in sunny Orlando, Florida! Meet with delegates from over EXPAND YOUR NETWORK IN ASIA 60 countries, learn from the best in the industry with over 100 education sessions, and get hands-on experience with over 400 exhibitors at at the IRC Conference in our Trade Expo. Incheon, South Korea The 2nd Annual International REALTORS® Conference We have a robust lineup of programming and meetings ready that are & Real Estate Expo (IRC) will take place in Incheon, South Korea specifically geared toward global agents, including the Global Real Estate from August 31-September 4. Expand your business Theater on the Expo floor. To view the schedule, visit realtor.org/conference, relationships with NAR’s Asia-Pacific partners and learn and click the “Search by Audience” link. Then select “International.” about investment opportunities between South Korea and the We hope to see you there! United States. REGISTER TODAY at realtor.org/conference Visit the event website for more information: www.iirce.com

Special thanks to the co-sponsors of the Global Real Estate Theater: